The Markit preliminary composite purchasing managers’ index (PMI) for the eurozone indicated that services and manufacturing output in the region contracted for a seventh consecutive month in August. But the pace of decline was marginally slower than in July.
The index rose to 46.6, compared to a reading of 46.5 for July, but is below the 50-point level that separates contraction from expansion. Economists had expected the reading to remain unchanged.
The services PMI reading slipped to 47.5 from 47.9 in July, and the manufacturing PMI advanced to 45.3 from 44.0.
The contraction continued across the eurozone. National indexes for the core countries of Germany and France both signaled shrinking output.
Rob Dobson, an economist at Markit, said:
Hopes that German economic strength will aid recovery in the broader currency union were dealt a blow by its rate of economic contraction accelerating and further signs that its export engine has slammed into reverse gear. … France may be edging closer to stabilization, while conditions outside the big two remain weak overall.
As the fiscal crisis clouds the economic outlook and investor confidence erodes, French President Francois Hollande and German Chancellor Angela Merkel are scheduled to meet in Berlin Thursday.
European stock markets trimmed gains in midmorning action on Thursday, following the release of PMI data.